# In the matter of Krishidhan Seeds Pvt. Ltd. TP 82-2019 {CP (IB) No. 500-7-NCLT-AHM-2018

> NCLT judgment dated 2020-09-16. Citation: TCN-2020-NCLT-00617. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 16 Sept 2020
- **Citation:** TCN-2020-NCLT-00617
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/krishidhan-seeds-pvt-ltd-tp-82-2019-cp-ib-no-500-7-nclt-ahm-2018-0bac5473

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Krishidhan Seeds Pvt Ltd to initiate the Corporate Insolvency Resolution Process (CIRP). The application was based on the grounds that the corporate debtor defaulted in paying a financial debt of Rs. 1,89,41,55,485/-. The corporate debtor's loan account was declared a Non-Performing Asset (NPA) on 10.06.2014. The application was filed on 19.09.2018.

## Facts

State Bank of India (SBI), the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Krishidhan Seeds Pvt Ltd, the corporate debtor, to initiate the Corporate Insolvency Resolution Process (CIRP). The basis for the application was the corporate debtor's default in paying a financial debt of Rs. 1,89,41,55,485/-. The loan was sanctioned via various letters dated 01.12.2006. The corporate debtor's loan account was declared a Non-Performing Asset (NPA) on 10.06.2014. SBI filed the Section 7 application on 19.09.2018. The corporate debtor argued that the application was time-barred, as it was filed more than three years after the date of default. SBI contended that the limitation period was extended because the

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the Insolvency and …

**Ratio:** The limitation period for filing an application under Section 7 of the IBC is three years

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**Reasoning:** The NCLT considered the date of default to be 10.06.2014, when the loan account was

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**Interpretation:** The Law of Limitation applies to applications filed under Section 7 of the IBC.

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**Application:** In this case, the default occurred on 10.06.2014, and the application was filed

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** State Bank of…
- **Respondents:** KRISHIDHAN SEEDS…

## Timeline

- **2006-12-01 — Sanction L…**: Financial Creditor granted and disbursed term loan and cash credit facilities to the…
- **2014-06-10 — NPA Decla…**: The Corporate Debtor's loan account was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 92(4) — Discharge order](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-92)

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